At the interbank forex market, the domestic unit opened at 73.53 against the US dollar, and moved in a range of 73.29 and 73.55. It finally finished at 73.33, registering a rise of 13 paise over its last close of 73.46 against the greenback.

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Traders said investors are focusing on the RBI's Monetary Policy Committee (MPC) meeting. The newly-constituted MPC of the Reserve Bank began its three-day deliberations on Wednesday. The decision of the rate-setting panel will be announced on October 9.

"This week is the RBI MPC outcome, we expect the central bank to maintain a status quo on the back of rising inflation. The focus will be on growth projections, as since February 2020, the RBI has not given a solid economic projection," said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.

Gupta added that "we are observing an occasional bullish attempt in the dollar. And as the dollar index marches towards 94 zone, there is an uptrend in USD-INR. Also, there still persists an uncertainty in the runup to US presidential elections and this cautiousness will keep dollar bulls active."

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, inched up 0.03 per cent to 93.71.

On the domestic equity market front, the 30-share BSE benchmark Sensex rose 304.38 points or 0.77 per cent to close at 39,878.95.

Similarly, the broader NSE Nifty jumped 76.45 points or 0.66 per cent to finish at 11,738.85.

Foreign institutional investors were net buyers in the capital markets, picking up shares worth Rs 1,101.76 crore on Tuesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 1.27 per cent to USD 42.11 per barrel.

Gaurang Somaiya, Forex and Bullion Analyst, Motilal Oswal Financial Services, said, "Rupee consolidated in a narrow range but gained marginally following a surge in domestic equities. Yesterday, the greenback rose against its major crosses in the latter half of the session after US President Trump called off negotiations with Democratic lawmakers on coronavirus relief legislation until after the election."

"In the next couple of sessions we expect volatility to drop ahead of the important RBI policy statement that will be released later this Friday. We expect USD-INR (Spot) to quote in the range of 73.20 and 73.80," he added.

Sriram Iyer, Senior Research Analyst at Reliance Securities, said the currency started the day on a weak note after the US dollar rebounded Wednesday morning after Trump called off stimulus negotiations.

"So risk appetite waned as uncertainty in the markets could continue until the November 3 election which helped the safe haven US dollar," he said.

However, after briefly trading weaker, the currency was aided by speculative dollar sales on bets that investment flows will pick up in the coming sessions, he added.
"Indian rupee gained after two consecutive daily losses on foreign fund inflows in Reliance subsidiaries and buoyant domestic equities indices," said Devarsh Vakil, Deputy Head Retail Research, HDFC Securities.

Market participants will eye today's US Vice Presidential candidates' debate and FOMC minutes. USD INR pair has a strong support at 73, he added.